Vander Doelen: Detroit's approaching surgery

Detroit Emergency Manager Kevin Orr is making the media rounds trying to psychologically prepare the city’s employees, creditors and citizens for the combat surgery to come.

Chris Vander Doelen, Windsor Star

Updated: May 13, 2013

Kevyn Orr anwsers a question during a news conference in Detroit, Thursday, March 14, 2013. Gov. Rick Snyder announced that he had chosen Orr, a partner in the Cleveland-based law and restructuring Jones Day firm, as Detroit's emergency manager. Snyder's already declared a financial emergency in Detroit, saying local officials lacked a plan to solve it. (Associated Press/Paul Sancya)

Detroit Emergency Manager Kevyn Orr is making the media rounds trying to psychologically prepare the city’s employees, creditors and citizens for the combat surgery to come.

The messy amputations Orr will have to perform on the city corporation to save it are going to be horrific. But they’re what’s needed to save Windsor’s cousin across the river from bleeding to death financially.

Detroit’s finances reached the mortally wounded stage a few years ago, late in its 40-year-long population decline. Once one of the richest cities in the world, now its resources are nearly all gone. They were spent trying to shore up unsustainable staff costs.

Everything of value Detroit owns is either broken, worn out or mortgaged to the hilt to pay for its employees. All the best accounting tourniquets have already been tried. As a viable municipal corporation Detroit only has a few weeks left to live.

“Thirty to 60 days,” Orr said Monday. After that who knows. But various apocalyptic visions spring to mind.

Yet, just as happened during the automotive bankruptcies four years ago, some of those responsible for the situation are still in denial about what is coming, and why. They’re still arguing that they should be spared because THEY had nothing to do with the problem.

Isn’t human nature grand? Those who have been running the Province of Ontario’s finances into the ground have been mouthing the same predictable denials over the last few years.

Detroit’s biggest employee group was still bleating desperately Monday that any cuts to its membership would eliminate some of the “good paying jobs” the city needs to survive.

Think about that logic for a minute, because you hear the same thing in Canada so often. It’s akin to a tumor arguing that it shouldn’t be cut out because it’s the only part of the body that’s still healthy and growing.

The report Orr issued Monday doesn’t really contain much information that’s new. It’s more of a program guide to the negotiations to come with Detroit’s employees, its unions, retirees, bond holders and other creditors.

Detroit, Orr says, “needs concessions from all parties” if it is to survive. If it doesn’t get them, most of the affected groups will end up with little or nothing after the bankruptcy courts get done slicing and dicing their claims.

Because of Detroit’s insolvency, none of those entitlement groups can possibly still see the money they believe they have coming to them. The cash just isn’t there, and it never will be due to the inexorable effect of compound interest on Detroit’s $15 billion debt. (Do you hear that, Premier Kathleen ‘We Only Owe $280 Billion’ Wynne?)

Orr’s job is to negotiate a new reality in which all the stakeholders groups have less staff, get less health care, less interest and much less principle paid back on the bonds.

Orr served up some sobering predictions in the report he delivered to concerned parties on Monday: the city now spends half its budget on public safety, which is a bitter irony for a city which has so little of it.

Detroit can’t service its debt, can’t meet its pension obligations, can’t afford all the people it pays.

Its last population of estimate of 700,000 is probably wrong, Orr says. It’s shrunk again, how much is unknown. But lower population means lower subsidies from the state and federal levels, which makes the situation even worse.

The city’s property taxes are not only too high, the valuations are completely out of kilter, annual totals are collapsing, and the collections system for municipal fines is broken.

“Just the facts … this is where we are, folks,” a straight-talking Orr told WJR radio.

Orr says major city assets such as Belle Isle, Detroit Sewer & Water and the city’s streetlight system may have to be leased or otherwise leveraged to help pay for the surgery he has to perform.

But Orr doesn’t believe he should also sell off any parts of its cultural heritage at the Detroit Institute of Arts. “I don’t want to go there … I don’t think I’m going to have to go there,” he told the Detroit Free Press editorial board of the DIA’s basement treasure trove.

Orr says he thinks saving Detroit is doable, but no one should expect an auto-style rebound of the city’s fortunes. The man is a cold realist.

So what can Windsor and Essex County do as non-immediate family, watching Detroit go through its dangerous surgery from across an international border?

I repeat a suggestion I made a few years ago: people who want to help Detroit should just pay a visit to its relatively safe downtown. Pay for parking, buy a meal, take in a game, buy an ice cream.

It’s not charity, and your visit would be good for the city’s morale, good for its finances. If enough of Detroit’s friends rally to visit the patient it can start to heal after Orr and team complete their battlefield surgery.

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